MOBILE, Ala. — A new historic tax credit, approved by Gov. Robert Bentley in May, may help lift the lagging development in Mobile into a new existence.
The antidote could be the state’s $20 million worth of tax exemptions provided annually, some say, combined with federal tax exemptions.
Lawmakers approved the program for the next three years, enough time to test the public’s appetite.
“Some of the senators wanted to see what the impact would be,” said Elisabeth Sanders, president and chief executive officer for the Downtown Mobile Alliance. “We believe that we will be able to show significant projects in that period of time.”
The Alliance partnered with another organization in Birmingham to persuade lawmakers to adopt the tax break three years ago. Both organizations hoped to spur interest in their cities’ old homes and buildings downtown.
“We sort of naively went up there with this package of incentive bills,” Sanders said.
The two groups’ argument was simple: Alabama was one of the only states in the region without such a program, Sanders said. Places with deep architectural roots like Charleston, Savannah and New Orleans all provided the incentive.
In 2011, a new market tax credit was passed, which can be used for community development in areas mired with economic difficulty and blight. The historic tax credit was passed a year later.
The program has generated some excitement for downtown Mobile and surrounding neighborhoods.
“It could be a game changer,” said Tilmon Brown, a property developer and historic preservation advocate, “with one reserve caveat: We don’t have a whole lot of them left.”
Other than the Gayfers building on Dauphin Street and the Van Antwerp Building on Royal Street there aren’t many large properties, Brown said. The restoration of the Pizitz Building in Birmingham is already lined up to take as much as $5 million, the maximum allowed for a commercial project.
Mobile still has a lot to gain, said Brown, who has worked on historic restoration projects in the past. The scope of activity may be more modest.
Historic restoration conjures an image of grand renovations for property buyers. “They think doing a historic property costs more than doing it new,” Brown said.
“You don’t have to do a museum-quality project like at Monticello or Mount Vernon.”